Potential Trading Partners Research Articles

On Nontraditional Trademarks

This piece regards nontraditional trademarks like sound, color, scent or even the vertical opening motion of a Lamborghini car door. The protection of trademarks has, historically, walked a fine balance. Naturally, as a society, we want to protect trademarks so that transaction costs are lowered as purchasers make a quick and easy purchasing decision. You see Tide, you know Tide, you buy Tide. However, the protection of nontraditional trademarks upsets this fine balance. If we go too far in the protection we grant unwarranted monopolies to companies to stifle the precise competition the law was meant to encourage. Sometimes, we do not have to protect a trademark claimant to recognize the savings in search costs. In fact, nontraditional trademarks are ornamental, at best, and, at worst, a horrible distraction from the larger job of substantive harmonization so that the transactions costs might be lessened for all companies around the world. This article traces the origins of this protection and concludes that nothing in our history predicts or requires this protection. One Supreme Court decision in 1995 open the floodgates for trademark application activity, but litigation rates did not, correspondingly, increase. I relied on a study I did of all 2,762 reported trademarks decisions from the inception of the Lanham Act (the US trademark law) through 2007. I coded every case. The numbers are reported in this article. Trademark registration activity is still very small and litigation activity is near nonexistent. However, the United States requires potential trading partners to protect nontraditional trademarks or we will not enter into bi-lateral trade agreements. We have encouraged the World Intellectual Property Organization to conduct a massive study on the protection of nontraditional marks. Based on this flawed study, some countries are now contemplating amending their trademark laws to explicitly recognize nontraditional trademarks. This is a cause without an objective. People generally believe that America routinely protects nontraditional trademarks. My data indicates that this is not the case. Then, countries are attempting to harmonize to the standard of protecting nontraditional trademarks thinking that is required in the United States when it is not. In the end, this provides an amazing distraction to the greater goal of harmonizing trademark laws. Civil Law countries believe they are harmonizing to an international standard of trademark law when that standard is a fiction created by the United States (without malice). Instead of working on far more important goals that have remained elusive for 120 years and without concern to harmonizing the underlying theory of trademark protection, countries are focusing efforts on protecting the motion of a Lamborghini door. My argument is that this is unfortunate. We should understand the distinctions between the two systems and work to close that gap in a meaningful way. No matter how many countries protect the motion of a Lamborghini door opening, without harmonizing the underlying theory and without addressing real issues, real harmonization will remain elusive.

Trading Communities, the Networked Structure of International Relations and the Kantian Peace

We argue that theories regarding the relationship between trade and conflict could benefit greatly from accounting for the networked structure of international trade. Indirect trade relations reduce the probability of conflict by creating (1) opportunity costs of conflict beyond those reflected by direct trade ties; and (2) negative externalities for the potential combatants' trading partners, giving them an incentive to prevent the conflict. Trade flows create groups of states with relatively dense trade ties, which we call trading communities. Within these groups, the interruptions to trade caused by conflict create relatively large costs. As a result, joint members of trading communities are less likely to go to war, however little they directly trade with each other. We systematically measure and define trading communities across various levels of aggregation using the network analytic tool of modularity maximization. We find significant support for our hypothesis, indicating that interdependence theory can be extended to extra-dyadic relations.

Selecting appropriate sellers in online auctions through a multi-attribute reputation calculation method

Online auctions have become immensely popular and created massive cash turnover in recent years. The volume of trade on eBay, the largest auction site in the world, reached US$6 billion in 2008. However, for a user intent on purchasing an item from an auction site, selecting an appropriate seller from the numerous choices is not an easy task. Even though most auction sites provide a concise binary reputation management mechanism to model the reputation of a trader through an integer value rating system, such a simple mechanism does not give users enough information about their potential trading partners. It is difficult to infer the right judgment rule correctly from knowledge of summing positive and negative ratings alone. We focus on developing an effective reputation model for online auctions to help users select a suitable seller. To accomplish this, four feature factors strongly related to online auction characteristics are adopted to assess the reputation of a trader. We also propose a multi-attribute reputation management (MARM) support tool to assist users in choosing sellers when using auction sites. In this research, actual transaction data collected from eBay were used to demonstrate the effectiveness of our method. Our results show that MARM is able to select more suitable sellers than other methods.

Thick market externalities in a spatial model

It is natural to think of thick market externalities as spatial phenomena. When agents are in close physical proximity, potential trading partners are more numerous and less costly to reach. Counteracting such agglomeration benefits is the dispersion force due to land being an essential input in production. The distribution of economic activities over space is an outcome of how decisions on location, land demand, and the search strategy of agents interact in spatial equilibrium. More desirable locations are those that allow their occupants more abundant and less costly access to potential trading partners. In spatial equilibrium, these are the densest locations, the occupants of which benefit from the strongest thick market externalities.

The Strategic Exploitation of Limited Information and Opportunity in Networked Markets

This paper studies the effect of constraining interactions within a market. A model is analysed in which boundedly rational agents trade with and gather information from their neighbours within a trade network. It is demonstrated that a trader’s ability to profit and to identify the equilibrium price is positively correlated with its degree of connectivity within the market. Where traders differ in their number of potential trading partners, well-connected traders are found to benefit from aggressive trading behaviour. Where information propagation is constrained by the topology of the trade network, connectedness affects the nature of the strategies employed.

Asymmetric Information, Bargaining, and Comparative Advantage in Trade Relationships: An Interactive Game

The concept of comparative advantage is a fundamental tool in economics. Yet, it is a concept that new students of economics frequently find challenging to grasp. In this interactive classroom game, I highlight the three essential lessons of comparative advantage: (i) individuals can have a comparative advantage (and thus benefit from specialization) in an activity despite not having an absolute advantage, (ii) the gains from specialization are greatest when individuals have the most heterogeneous skill sets, and (iii) the extent of each individual's share of the gains from specialization is often left to negotiation, with asymmetric information playing an influential role. This classroom game allows each player to possess a unique production function, thus better resembling the diverse pool of potential trade partners that characterizes real life.

A world trade model with bilateral trade based on comparative advantage

This paper describes an extension of Duchin's world trade model to include the explicit representation of transportation costs, permitting the endogenous determination of bilateral trade flows and region-specific prices. The original model is a linear program that, based on comparative advantage and the minimization of factor use, determines regional production and trade flows as well as world prices and scarcity rents for m regions, n good, and k factors. The new world trade model with bilateral trade achieves its objectives by introducing transportation services and geographically dependent transportation requirements for each traded good and each pair of potential trade partners. The formulation of this model and its major properties are presented, and results from a preliminary analysis with 11 regions, eight goods, four transportation sectors, and six factors of production are reported and compared with corresponding results from the world trade model. On the basis of this comparison, we conclude that transportation costs have little impact on a region's total imports or exports of a given commodity.

TRADE OPENNESS: AN AUSTRALIAN PERSPECTIVE

Australia's external trade is relatively low compared with the size of its economy. Indeed, Australia's openness ratio (exports plus imports as a proportion of GDP) in 2002 was the third-lowest among the 30 OECD countries. This paper seeks to understand Australia's low openness by analysing the empirical determinants of aggregate country trade. We present an equation for country openness which explains a substantial amount of the cross-country variation. The most important explanators of openness are population and a measure of distance to potential trade partners. Countries with larger populations trade less, as do countries that are relatively more remote. Furthermore, after controlling for trade policy there is little evidence of a positive correlation between openness and economic development. The openness equation suggests that Australia's level of trade is relatively close to what would be expected. The most important factors in explaining Australia's low openness ratio are its large geographic size and distance to the rest of the world.

Decentralized international exchange

Abstract. We utilize a random‐matching model to examine the relationships between market frictions and international trade. In our setting, an individual may choose to search abroad where she may have a cost advantage, but is less likely to meet potential trading partners, owing to higher market frictions. Interestingly, we find that international trade may be associated with lower welfare than autarky. We show how this is due to price distortions resulting from bargaining when there are opportunities for exchange across countries. JEL classification F10, C78, D83

THE ECONOMICS OF MUTUALISMS: OPTIMAL UTILIZATION OF MYCORRHIZAL MUTUALISTIC PARTNERS BY PLANTS

Can choice of mutualistic partners and the degree of their utilization determine (1) mutualistic partner coexistence, (2) relative abundance of mutualistic partners, and (3) environment-dependent changes in relative abundance? We investigate these questions in the context of the plant-mycorrhizal fungal mutualism by building a biological market model potentially applicable to other mutualisms as well. We examine the situation where a single plant selectively utilizes member(s) of a group of ectomycorrhizal potential trading partners. Under biologically realistic circumstances, the plant may simultaneously utilize multiple partners, its degree of utilization determining the community structure of the fungi. If utilization of multiple partners is optimal, the marginal cost of acquiring additional nitrogen from every trading partner must be equal while the marginal cost of acquiring it from any unutilized partner must be larger. Because the plant's nitrogen demand is light dependent, the composition of the fungal species among its trading partners changes along light-availability gradients. We discuss the design of an experiment to test the key prediction of our model, the equalization of marginal cost.

Contract enforcement in the early transition of an unstable economy

How were contracts among firms enforced in the early phase of a transition economy when firms lacked experience with commercial contracts or legal procedures? What were their views of their new business environment? We interviewed a sample of Bulgarian firms, including private, state-owned and cooperative firms in 1994. Consistent with Williamson's [Williamson, O., 1994. Institutions of economic development and reform. In: Bruno, M., Pleskovic, B. (Eds.), Proceedings of the World Bank Annual Bank Conference on Development Economics, World Bank, Washington, DC, pp. 171–197] theories, complex contracts were quite limited, sometimes implying the breakdown of important markets, but we also found that even spot-market contracts had severe problems of bilateral dependency. Having been “burned” in previous transactions, firms were very cautious in dealing with new potential trading partners and tried to work closely with trustworthy counterparts. These results are consistent with Klein et al. [Klein, B., Crawford, R., Alchian, A., 1978. Vertical integration, appropriable rents, and the competitive contracting process. J. Law Econ. 21, 297–326] theory.

Perceptions of moral character modulate the neural systems of reward during the trust game

Studies of reward learning have implicated the striatum as part of a neural circuit that guides and adjusts future behavior on the basis of reward feedback. Here we investigate whether prior social and moral information about potential trading partners affects this neural circuitry. Participants made risky choices about whether to trust hypothetical trading partners after having read vivid descriptions of life events indicating praiseworthy, neutral or suspect moral character. Despite equivalent reinforcement rates for all partners, participants were persistently more likely to make risky choices with the 'good' partner. As expected from previous studies, activation of the caudate nucleus differentiated between positive and negative feedback, but only for the 'neutral' partner. Notably, it did not do so for the 'good' partner and did so only weakly for the 'bad' partner, suggesting that prior social and moral perceptions can diminish reliance on feedback mechanisms in the neural circuitry of trial-and-error reward learning.

The Swift Trust Partnership: A Project Management Exercise Investigating the Effects of Trust and Distrust in Outsourcing Relationships

The Swift Trust exercise provides instructors with the opportunity to discuss the issues of managing trust and distrust perceptions in a team-based design. Lewicki, McAllister, and Bies’s (1998) framework is used to allow students to experience the difficulties of deriving a common set of contract requirements based on team dynamics and reputational factors of a potential future trading partner. This interteam exercise provides instructors with a medium-term simulation (from three to four class periods) that can be used to discuss integrating simultaneous trust and distrust perceptions. Discussion of pedagogical issues and implications is provided to assist instructors in conducting this exercise.

POINT-NONPOINT SOURCE WATER QUALITY TRADING: A CASE STUDY IN THE MINNESOTA RIVER BASIN

ABSTRACT: Contrary to the general trend of only a few actual trades occurring within point-nonpoint source water quality trading programs in the United States, two trading projects in the Minnesota River Basin, created under the provisions of National Pollutant Discharge Elimination System (NPDES) permits, have generated five major trades and numerous smaller ones. In this paper, these two projects are described to illustrate their origins, implementation, and results. It was found that several factors contributed to the relatively high number of trades in these projects, including the offsetting nature of the projects (hence a fixed number of credits that the point sources were required to obtain), readily available information on potential nonpoint source trading partners, and an effectively internal trading scheme used by one of the two projects. It was also found that long term structural pollution control measures, such as streambank stabilization, offered substantial cost savings over point source controls. Estimates of transaction costs showed that the total costs of the trading projects were increased by at least 35 percent after transaction costs were taken into account. Evidence also showed that in addition to pollution reduction, these two trading projects brought other benefits to the watershed, such as helping balance environmental protection and regional economic growth.

Matchmaking for business processes based on conjunctive finite state automata

Web services have a potential to enhance B2B e-commerce over the internet by allowing companies and organisations to publish their business processes on service directories where potential trading partners can find them. This can give rise to new business paradigms based on ad-hoc trading relations as companies, particularly small to medium scale, can cheaply and flexibly enter into fruitful contracts, e.g., through subcontracting from big companies. More business process support by the web service infrastructure is however needed before such a paradigm change can materialise. The current infrastructure does not provide sufficient support for searching and matching business processes. We believe that such a service is needed and will enable companies and organisations to establish ad-hoc business relations without relying on manually negotiated frame contracts like RosettaNet PIPs. This paper gives a formal semantics to business process matchmaking and an operational description for matchmaking.

Matchmaking for Business Processes Based on Choreographics

Web services have a potential to enhance B2B e-commerce over the Internet by allowing companies and organizations to publish their business processes on service directories where potential trading partners can find them. This can give rise to new business paradigms based on ad-hoc trading relations as companies, particularly small to medium scale, can cheaply and flexibly enter into fruitful contracts, for example through subcontracting from big companies by simply publishing their business processes and the services they offer. More business process support by the Web service infrastructure is however needed before such a paradigm change can materialize. A service for searching and matchmaking of business processes does not yet exist in the current infrastructure. We believe that such a service is needed and will enable companies and organizations to be able to establish ad-hoc business relations without relying on manually negotiated interorganizational workflows. This article gives a formal semantics to business process matchmaking based on finite state automata extended by logical expressions associated to states.

Working towards compliance with international standards

Developing countries are increasingly coming under pressure to improve their delivery of veterinary services as a prerequisite for entering the competitive arena of international trade in animals and animal products. The demands placed on developing countries by predominantly developed countries to comply with international disease prevention standards have also resulted in increasing demands on the financial, human and technological resources of these developing countries. The minimum requirements of the Agreement on the Application of Sanitary and Phytosanitary Measures and the standards, guidelines and recommendations of international standard-setting organisations, such as the OIE (World organisation for animal health), are evaluated in terms of the opportunities embedded within these guidelines for developing countries. Such an evaluation indicates that the rights and obligations contained in these standards, guidelines and recommendations do not necessarily protect only the interests of developed countries but also encourage developing countries to work towards the levels of compliance and disease prevention required by their potential trade partners. The costs of this compliance can be reduced by exploiting more cost-effective alternatives for delivering services, when dictated by budgetary constraints. International organisations have illustrated on many occasions, and through a variety of development programmes, that they do indeed realise their responsibility towards developing countries in the areas of increased capacity building and technical assistance. If international organisations can refocus their interventions on the actual and specific needs of developing countries, then they can help to expedite the process of compliance with international standards.

Trade and Linked Exchange; Price Discrimination Through Transaction Bundling

In this paper we try to explain how price discrimination can cause bilateral trade patterns of the type seen under countertrade agreements. We interpret countertrade as a form of transaction bundling, which can discriminate between potential trading partners, and we combine characteristics from two explanations as to the existence of countertrade: Price discrimination through transaction bundling, and adverse selection arising from the uncertainty in the quality of the goods produced by trading partners in a less developed country (LDC) leading to a partner preference from the side of the Western (DC) firm. Our paper shows that the trade volume prospects of a firm in a LDC can be considerably enhanced if a countertrade transaction is bundled, and that such gains in trade become greater (relative to the case of no bundling), the greater the degree of quality uncertainty in the good it sells. It is also shown that it is profit maximising for a firm in a DC to offer mixed bundling for the exchange transaction, and that the profits derived from such bundling are a decreasing function of both the degree of uncertainty in the good sold by the firm in the LDC, and the marginal cost of the good sold by firm in the DC.

European Union: From social integration to social state

This paper analyzes recent free trade arrangements from a positive political economy perspective. In contrast to most other literature, which fails to take into account geographical factors, it is argued here that proximity and transportation costs play an important role in trade arrangements. Another important also largely neglected factor is the degree of social cohesion in terms of labor standards among potential trading partners. Accepting social integration might also be a condition for admitting those countries to the agreement. Changes of trade policy over time can therefore be explained by changes in the relative political influence of the sectors considered. The other important factors are, of course, a change in the degree of retaliation, leading to lower tariffs under higher retaliation, and a leveling of social standards. Redistribution across countries could also considerably change the optimal rate of tariff. The EU with its regional cohesion funds might be a good example of how those are used as a side-payment for diminishing the social divergence in the member countries. Countries with higher standards should only be willing to integrate when others raise their social standards as well. The negotiations about the social protocol in the EU indicate that this is in fact the case. More than 40 years of European integration have led to an habituation of thinking of the European Community as something ideologically neutral, which transcends normal political debate. European issues, it seems, do not fit the structure of the usual right-left ideological controversy. The only open fault-line in European politics is between advocates of "more" and those of "less" integration. The paper explores the potential cognitive and political gains of a change of perspective. It argues that the issue of more or less integration is often not interesting in itself but only to the degree that it influences the content of policies. It further shows that the policies at stake are normally such, that they can be usefully debated in the right-left framework. The decision about the site of policy control - national or European - is often only the guise in which a decision about the redrawing of the boundary between market and state, between the sphere of competitive allocation and the sphere of political coordination, materializes. This paper aimed at stressing the fundamental differences between conventional and contractarian constitutional orders. To achieve it, we have used the concept of common knowledge and have related it to its political philosophy background, especially with regard to communication and induction. The former generates a spontaneous social order - it is an evolutionist view that belongs to the Hume - Menger - Hayek tradition. The latter produces a contractarian vision shared by the Brennan-Buchanan-Tullock tradition. We consider here a basic distinction between institutions and conventions. An institution is considered as a formal, explicit rule, while a convention appears to be a tacit, implicit agreement. The former can be associated with contractarian constitutionalism, whereas the latter is related to evolutionism. In this context, institutions should not be understood as formalized conventions (such as law in Hayek). They are rather the expression of a voluntary and deliberate agreement, of a covenant. The application describes features relevant to the development of a European constitution and the corresponding unified legal system. It requires a clear vision of what a European "state" is meant to be or become. Then, once a constitutional setting is chosen, one must address the question of legal organization, in particular the nature of administrative law. Two different acceptation of law are thus associated with the two concepts of convention and contractarian institution. The former can be regarded as customary rule a kind of common knowledge that emerges from tradition and sympathy. By contrast, the latter is the place of explicitly created common knowledge. If it is to become more integrated, Europe will have to tackle this constitutional question, either in an evolutionary or in a contractarian way.

The relationship between ethics and firm practices in Russia and the United States

One of the fundamental objectives of corporate governance is to promote a climate that fosters ethical decision-making. As transitioning economies move toward more transparent and democratic systems the existence of policies, such as codes of ethics, that attempt to monitor and control moral behavior will become increasingly important. The establishment of ethical standards not only encourages trust with potential trade partners but also is likely to cultivate foreign direct investment. In this study, data collected from 112 U.S. and 74 Russian respondents reveal some intriguing patterns across these two diverse economies. Managerial implications and future research directions are also discussed.